Yelp Inc.

Hello and welcome to the Yelp first quarter 2023 earnings conference call. My name is Elliot and I'll be coordinating your call today. If you would like to register a question during the presentation, please press star followed by one on your telephone keypad. I'd now like to hand this to James Milne, SVP of Finance and Investor Relations. The floor is yours, please go.

Good afternoon everyone and thanks for joining us on Yelp's first quarter 2023 earnings conference call. Joining me today are Yelp's Chief Executive Officer, Jeremy Stoppelman, Chief Financial Officer David Chorsbach, and Chief Operating Officer Jez Nockman. We published the shareholder letter on our investor relations website and with the SEC and hope everyone had a chance to read it. We'll provide some brief opening comments and then turn to your questions. Now I'll read our safe harbor statement. We'll make certain statements today that are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this call and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. In addition, we are subject to a number of risks that may significantly impact our business and financial results, please refer to our SEC filings as well as our shareholder letter for a more detailed description of the risk factors that may affect our results. During our call today, we'll discuss adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with generally accepted accounting principles. in our shareholder letter released this afternoon on our filings with the SEC, each of which is posted on our website. You will find additional disclosures regarding these non-GAAP financial measures, as well as historical reconciliations of GAAP net income with both adjusted EBITDA and adjusted EBITDA margins. And with that, I will turn the call over to Jeremy.

Thanks, James, and welcome, everyone. Yelp had a great start to the year with strong first quarter financial results and considerable product momentum. So far, we've already rolled out more than a dozen new product updates in 2023. Our performance-based ad products and high intent audience continue to generate robust advertiser demand in the first quarter. Net revenue increased by 13% year over year to $312 million, representing a record for the sixth quarter in a row. We delivered this performance with a net loss of $1 million and adjusted EBITDA of $54 million. In the first quarter, we leaned into our roadmap to deliver value to advertisers across our key categories. These efforts resulted in the recent launch of Yelp Guaranteed, which provides consumers with even greater confidence when hiring service pros. Advertising revenue growth from services businesses accelerated from the fourth quarter of 2022 to 15% year over year. The home services category was particularly strong, with 25% year over year revenue growth. Advertising revenue from restaurants, retail, and other businesses increased by 10% year over year. Our portfolio of down funnel ad products resonated with SMB and multi-location advertisers in the first quarter, and we continue to make progress against our initiative to drive sales through our most efficient channels. Self-serve revenue increased by approximately 25% year over year, and multi-location revenue increased by approximately 15% year over year. After increasing our investment in the consumer experience in 2022, our teams hit the ground running in 2023 by introducing a number of exciting new product and feature updates to make Yelp even more engaging and useful for users. We've rolled out new ways for consumers to contribute to and interact with our trusted content, including interactive review topic suggestions, a video review format, and new review reactions. AI presents a great opportunity to enhance our search and discovery experiences for consumers. Leveraging our rich first-party data set, we improved our search suggestions and applied LLM technology to surface even more relevant review highlights in the first quarter. We also added a surprise me feature to assist with restaurant discovery. These updates represent the most significant product momentum we've had on the consumer side of our business in recent years, and we continue to have a robust pipeline of projects for the remainder of 2023 and beyond. In summary, Yelp's standout performance in the first quarter with faster revenue growth than many of our advertising peers demonstrates the value of our broad-based local ad platform. I'm incredibly proud of the Yelp team, which has established a track record of consistent execution. With our strong results and significant product innovation in the first quarter, I'm confident in our ability to drive long-term profitable growth. With that, I'd like to turn it over to David.